Stressing India’s Unique Telecom Mkt, COAI Calls for Govt to Take Lead in Regulating OTTs for Industry Growth
The Cellular Operators Association of India (COAI) has called upon the government to take the lead in creating regulations for Over-the-Top (OTT) players rather than adhering to global benchmarks, stressing the uniqueness of India’s telecom market conditions. COAI Director General SP Kochhar pointed out several key aspects related to this proposal and the justifications behind it.
One of the major reasons is the significant contributions of Indian telecom service providers (TSPs) in fuelling the nation’s digital revolution. It was stated that TSPs have invested heavily in deploying networks, ensuring widespread connectivity, and introducing cutting-edge technologies such as 5G, while maintaining affordable tariffs for consumers.
This has resulted in over 860 million broadband subscribers in India. But despite these achievements, the telecom sector remains one of the most heavily taxed in the country, paying 30% in taxes. Moreover, the recent auctions for spectrum acquisition have incurred substantial costs for TSPs, further straining their financial positions.
As per the association, there is a disparity between the telecom service providers and OTT players, particularly Large Traffic Generator (LTG) OTTs. While TSPs invest in building and maintaining extensive networks, LTG OTTs generate disproportionately high traffic without contributing to network expenses.
These OTTs, which constitute a handful of global giants, earn revenue from both consumers and advertisers but channel it back to their home countries. SP Kochhar suggested that they should contribute to the Indian market, considering India’s prominence as a major global market for these OTTs.
COAI proposed a fair share contribution from OTTs to TSPs, stressing that this would not violate the principles of net neutrality. The rationale for this contribution stems from the fact that TSPs bear the costs of carrying traffic generated by OTTs without receiving compensation.
Drawing comparisons to other industries such as broadcasting and roadways, the association argued that OTTs should share a proportionate charge with TSPs for their enhanced network requirements. As per SP Kochhar, this approach would ensure that TSPs can continue to invest in expanding and improving network infrastructure.
In terms of benefits, COAI has outlined a few, including improved connectivity for consumers, particularly in underserved areas. It was said the revenue generated from OTTs could be reinvested in enhancing network coverage and quality, ultimately benefiting users. The proposal from COAI also includes provisions to support smaller OTT players, ensuring that they are not burdened by usage charges, thus promoting innovation and entrepreneurship in the sector.
However, in conclusion, the association calls for India to take the lead in regulating OTT players reflecting the evolving dynamics of the telecom industry and the need for a fair and sustainable ecosystem that benefits both TSPs and consumers. The proposal aims to ensure that OTTs contribute their fair share to support the growth and development of India’s digital infrastructure and connectivity.